“Petty” Corruption Isn’t Petty

Grand corruption attracts plenty of attention—from activists, the mainstream media, and other commentators (including on this blog)—and for good reason. While the media may simply be riveted by the decadent lifestyles of corrupt actors, the anticorruption community has increasingly recognized the devastating impact that kleptocrats and their cronies can have. No doubt, this attention to grand corruption is welcome and recent successes in fighting it are laudable. At the same time, though, this increased focus on grand corruption carries with it the risk of making smaller, more everyday forms of corruption—sometimes called “petty” corruption—seem less consequential.

Yet so-called “petty” corruption remains widespread, and its aggregate impact should not be underestimated. By way of example, consider the most recent results from the Transparency International (TI) Global Corruption Barometer (GCB) survey of citizens in Latin America and the Caribbean, which found that one-third of people who used a public service paid a bribe in order to do so. In other words, for these 90 million people, their ability to access a government service to which they were entitled was conditioned upon an extralegal payment—and that’s just accounting for this one region.

Even as the anticorruption community rightly focuses attention on combatting grand corruption, we can’t forget the real havoc wreaked by smaller-scale corruption. So-called “petty” corruption is not a petty concern. Rather, it’s a serious, pervasive problem that deserves just as much sustained attention as does politicians buying collector cars and oceanfront properties with assets from their secret offshore bank accounts. At the risk of repeating familiar points, it’s worth reviewing the ways in which small-scale corruption has, cumulatively, a range of incredibly destructive effects:

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Incorporating Corruption and Accountability into Public Health Education

Corruption is a serious threat to achieving global health objectives. As Professor Taryn Vian pointed out, corruption increases the cost and decreases the availability of medicines and medical equipment, creates barriers to health services, enables the spread of fake medicines. As I argued in a previous post, corruption also undermines the trust in government that is essential to dealing with public health emergencies. The importance of training and educating public health professionals on how to identify and understand problems of corruption in health, along with how to incorporate anticorruption strategies into programs and institutions, would therefore seem quite obvious. Yet the core public health curriculum at leading graduate institutions generally does not include a serious discussion of corruption and its impacts on public health. There are exceptions–Professor Vian, for example, teaches on this topic in her courses at Boston University’s School of Public Health—but for the most part corruption appears to be absent from public health course catalogs.

It’s not clear why this is the case. It may be that there is a shortage of professors who are knowledgeable or willing to teach on the topic, or perhaps most graduate students do not see the value in enrolling in such a course, especially if they have not witnessed corruption firsthand. Whatever the reasons, the end result is that students graduate from public health programs with little knowledge about the causes and consequences of corruption in the health sector, the reasons why good governance is so important to health care systems, the best ways to prevent, detect, and report cases of corruption. This is a problem. Public health education can and should place greater emphasis on corruption (and related topics like good governance and accountability), for three main reasons: Continue reading

The Disease of Corruption: How Distrust in Corrupt Governments Impacts Emergency Health Delivery

Corruption negatively impacts health outcomes. As noted in a previous post, corruption is associated with higher infant, child, and maternal mortality, overall poor health, the spread of antibiotic resistance, and many other problems. When we consider the reasons why corruption undermines health, the most obvious include things like theft or diversion of healthcare resources, or how demands for extra “informal” payments to healthcare providers can deprive poor communities of adequate care. There is, however, another important mechanism through which corruption undermines public health: corruption undermines trust in government and government-run services, which in turn can hinder effective health delivery and thereby escalate the spread of infectious diseases, especially in emergency situations like the recent Ebola crisis. Continue reading

Corruption in Health Aid: Escaping the Scandal Cycle

William SavedoffAmanda Glassman and Janeen Madan of the Center for Global Development, a Washington-based development policy think tank, originally wrote this post for CGD.  It is reprinted here with permission.

Health aid pays for life-saving medicines, products, and services in the poorest countries in the world. Funding for such uses needs to be smooth and uninterrupted. But when fraud is detected, funds are subject to sudden stops and starts—the result of a sequence of events set off by the scandal cycle in health aid depicted below. We examine this idea and offer ways to escape the cycle in a new CGD policy paper we summarize here.

The Scandal Cycle


To understand the scandal cycle, we looked at four cases of fraud and response involving the World Bank in India, USAID in Afghanistan, the Global Fund in Mali, Djibouti and Mauritania, and European donors in Zambia. While corruption is discovered in different ways, scandals tend to erupt when the press publicizes it or a funder reacts strongly. Once allegations are in the public eye, funders typically react by suspending aid. Then, they work with recipients to create action plans for improving financial management systems, and eventually resume funding.

This scandal cycle is, unfortunately, all too common. In May, the Global Fund published an investigation that tracked down $3.8 million in fraudulent expenditures at Nigeria’s Department of Health Planning, Research & Statistics. The Fund’s executive director issued a statement reaffirming the Fund’s “zero tolerance of corruption” policy, underscoring that the Fund had frozen disbursements to several Nigerian agencies, and calling for reforms to government control measures.

As with the cases we analyzed in our paper, the focus on fraud often comes at the expense of considering the scale of corruption and the impact of disruption on health programs. While $3.8 million is no small number, it represents less than one percent of the $889 million in grants to Nigeria that the Global Fund audited in a companion report on the Wamboo.org project. Furthermore, the impact of international support on improving health has been rather large; the Global Fund’s own statement indicates that international support has helped Nigeria reduce deaths from malaria by 62 percent since 2000.

Halting disbursements to health programs can have serious consequences for service delivery, health outcomes, and institutional development. In light of the scale of fraud and the potential health impact, is suspending aid an effective response? And without information on health impact, how would we know?

We argue that funders may be able to escape the scandal cycle—and reduce such disruptions—by paying greater attention to information on program achievements. Currently, funders pay a lot of attention to procedural issues. For example, a 2013 report from the Special Inspector General for Afghanistan Reconstruction (SIGAR) documented weak accounting systems at the Afghan Ministry of Health. Even though the report had no direct evidence of fraud and the health program was successfully delivering services, SIGAR recommended USAID suspend the program.

By contrast, the World Bank’s 2008 Detailed Implementation Review of the Indian health sector not only included evidence of procedural failures, such as bid rigging, but also documented results failures, like continuing high malaria rates and inoperative hospitals. If the World Bank and India had reported these results failures earlier, the cases where corruption was big enough to affect programs would have come to light much sooner.

We think results on service delivery, population health, and institutional development are the key piece of information that could change the dynamics of the scandal cycle. This kind of information can help funders communicate more effectively about why they are deciding to suspend or continue aid, set appropriate standards for when aid should be halted, and establish new funding mechanisms that make it more difficult to divert funds.

We recommend the following three steps to improve funder response:

  1. Communicate using results. When a scandal erupts, communicating the funder’s actions to control or prevent corruption to stakeholders, the media, and the broader public is important. But emphasizing whether health aid programs are achieving intended results is also an essential component of the communications strategy. If a program is achieving results, stakeholders and constituents would better understand a funder’s decision not to suspend aid when a scandal erupts (while investigating abuse and working with the recipient to address the problem).
  2. Differentiate responses by results. In addition to responding to corruption allegations (which typically come from whistleblowers), tracking program results could help funders detect corruption. If a program is falling short of achieving results, corruption might be a contributing factor and an investigation could help determine whether and how much. Moreover, results data would allow funders to determine whether corruption is—or is not—hampering program implementation, and to recalibrate anti-corruption controls accordingly.
  3. Disburse in proportion to results. Where feasible, paying for results in health could help ensure that funds are only paid out when results are achieved. This approach makes it harder to divert funds because payments only occur after the program’s impact is measured. In programs that pay for results, dishonest people can only skim off funds if they have been very efficient at generating impact. In practice, they are likely to simply set their sights elsewhere.

The Scandal Cycle

The Global Fund’s recent statement recognizes the importance of communicating the results of its health grants to Nigeria, but it doesn’t address whether it is helpful to suspend aid over a relatively small amount of fraud or lack of supporting documentation. Our paper encourages funders to incorporate information about program results into their risk management strategies so they can communicate better, detect corruption sooner, and make more considered choices about creating or responding to scandals.

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Guest Post: Connecting Health and the Fight Against Corruption

Taryn Vian, Associate Professor of Global Health at the Boston University School of Public Health, contributes the following guest post:

The recent endorsement of the Sustainable Development Goals (SDGs) has prompted greater discussion and debate about the most important aspects of, and the most effective means for achieving, sustainable development. Most of the discussion of corruption in the context of the SDGs has focused on SDG 16 (“Promote just, peaceful, and inclusive societies”), which specifically includes anticorruption and related objectives among its targets (and which has prompted some debate on this blog – see here, here, here, and here.) But the fight against corruption is also closely linked to the achievement of another one of the SDGs: SDG 3 (“Ensure healthy lives and promote well-being for all at all ages”).

On its face, SDG 3 is about health, not corruption. But the fight against corruption is in fact closely connected to SDG 3, and health professionals need to open their eyes to this connection. Corruption worsens health outcomes in many ways: siphoning off resources that are supposed to be devoted to health care (for example, through embezzlement and absenteeism), increasing the cost and decreasing the availability of medicines and medical equipment (or enabling the spread of fake medicines), creating barriers to use of health services (particularly by poor and uneducated people who are especially vulnerable to bribery) and reducing the overall availability and quality of health services. Thus the fight for increased health ought to be—perhaps must be—seen as inextricably connected to the fight against corruption.

Though measuring the impact of corruption on health is challenging, at this point we have a sufficiently large (and growing) body of evidence that corruption threatens health. Consider the following: Continue reading

Trust in Government and Public Health: Corruption and Ebola Revisited

A little while back I did a short post expressing skepticism about some claims that corruption was a significant contributor to the Ebola outbreak in West Africa. I agree that insofar as corruption diverts resources from public health and sanitation, or leads to undersupply of necessary medicines and supplies, it is likely to worsen both the frequency and magnitude of public health problems. But I was more skeptical that there was any direct evidence that the admittedly rampant corruption in places like Liberia, Sierra Leone, and Nigeria was a major contributor to that particular public health crisis.

Last month I was fortunate enough to moderate a panel on corruption and public health at the World Bank’s International Corruption Hunters Alliance meeting, and the presentations at that panel have altered my thinking about this issue somewhat. More generally, several of the presenters from countries hit hard by Ebola — including Commissioner Joseph Kamara of Sierra Leone’s Anti-Corruption Commission and Commissioner Aba Hamilton-Dolo of the Liberian Anti-Corruption Commission — made a convincing case that corruption has been, if not a primary cause, then at least a significant contributor to the extent and severity of the Ebola outbreak. Of course, there is still relatively little direct evidence, and it’s reasonable to wonder whether commissioners on anti-corruption commissions may be likely to overestimate the significance of their particular issue area for the most pressing immediate crisis facing their nations. Nonetheless, they did make a plausible case that corruption, while perhaps not a direct contributor to the outbreak, has significantly impeded the response.

On this point, Commissioner Hamilton-Dolo emphasized an important argument that I hadn’t really paid enough attention to, even though I quoted Professor Taryn Vian making essentially the same point in my earlier post: in addition to the squandering of public health resources, corruption may also impede the effective response to public health crises by undermining trust in government. The argument, as I understand it, goes something like this: Continue reading

Is Corruption Partly Responsible for the Ebola Crisis?

There’s been an interesting mini-debate over at the FCPA Blog about whether, or to what extent, corruption is partly responsible for the severity of the Ebola crisis in West Africa. Richard Cassin, the publisher and editor of the FCPA Blog, argued that it is. He made this argument initially in a post from this past August entitled “Ebola tragedy is also a story of graft.” He offered as evidence the following observations: (1) the WHO and other observers estimate that a very high percentage–perhaps up to 25%–of global spending on public health is lost to corruption; (2) the very high Ebola fatality rates in West Africa have been attributed in part to the lack of adequate intensive care facilities to administer the treatments; and (3) the countries hardest hit by the Ebola outbreak–Guinea, Liberia, Sierra Leone, and Nigeria–are reputed to be highly corrupt, as indicated by their very poor scores on Transparency International’s Corruption Perceptions Index.

Many critics who commented on Cassin’s initial post complained that the evidence offered did not in fact support the strong claim in the title that corruption has contributed significantly to the Ebola outbreak. In particular, the critics pointed out that: (1) the fact that a great deal of public health spending generally is lost to corruption does not actually tell us whether corruption was a major factor in the particular case of the Ebola outbreak, and (2) the low ranking of the affected countries on the CPI likewise–even if we concede that the CPI is a decent measure of actual corruption–does not indicate that corruption caused (in any significant way) the Ebola outbreak to be as lethal as it has been; at most it shows a correlation that might be explained by any number of other factors.

Cassin responded with a second post last month in which he rebutted the critics. He acknowledged that while one can never establish with “scientific certainty” that corruption has a causal effect on the severity of the Ebola outbreak, there is powerful circumstantial evidence that corruption is a “gateway” to this and other public health crises (as well as other problems like terrorism and crime), because it siphons off public resources. Cassin cites to a couple of research papers that purport to show that corruption in general has adverse impacts on public health, in particular because it adversely affects access to clean water and sanitation.

While I’m generally sympathetic to Cassin’s larger point, I think that the criticisms are fair ones. Here’s my take. Continue reading